Eurozone crisis: EU moves to loosen grip of austerity
Alexis Tsipras, the leader of a group of radical Greek leftists that has been charged with trying to form a government, tore into the terms agreed by Athens for a €130bn bailout, threatening to nationalise the Greek banks and warning that Greece would walk away from its rescue deal with the eurozone, the Guardian reports.
In Brussels, Herman Van Rompuy, the European council's president, called a special summit to be held in a fortnight at which the French president-elect, François Hollande, will be able to unveil his proposals for tackling the euro crisis. The European commission supported Hollande's demands for pan-European investment to generate growth and create jobs.
"We are seizing the moment to advance our proposals in the new political climate," said Olli Rehn, the commissioner tasked with dealing with the euro crisis, as he accepted that the weekend's elections in France and Greece had changed the face of European politics.
Rehn and José Manuel Barroso, the commission's president, said it was likely that EU leaders would agree next month to increase the capital of the European Investment Bank by €10bn, which could be used as collateral to inaugurate large infrastructure "pilot projects" on a pan-European scale this year. Hollande campaigned on a similar platform.
The commission also says that there is €82bn in unused structural funds from the EU's medium-term budget which could be tapped to promote growth and jobs. That amounts to a quarter of the EU budget. Its use in this way is likely to run into stiff opposition from national governments.
In a further sign that EU leaders are being forced by popular pressure to loosen the austerity that has been the main response to the 30-month debt and currency crisis, Rehn signalled there could be a relaxation of tight fiscal conditions for countries struggling to meet binding budget targets. But any loosening would not apply to Greece, whose bailout is subject to terms set by the commission, the European Central Bank and the IMF.
Tsipras said he viewed that deal as null and void. "The popular verdict clearly renders the bailout deal invalid," he said, after two-third of Greeks voted on Sunday for parties rejecting the bailout terms. He called for a moratorium on Greek debt repayments, an investigation of the Greek banks, and the lifting of immunity of Greek MPs to facilitate their prosecution if deemed appropriate.
Tsipras's radical coalition was the moral victor of the Greek election, coming second with almost 17% of the vote and beating the mainstream centre-left Pasok into third place. He was asked to try to form a government after an attempt by Antonis Samaras, the centre-right leader, collapsed within hours. No one expects Tsipras to succeed in cobbling together a parliamentary majority either. The talk in Athens was of Greeks having to return to the polls next month. Samaras said Tsipras was asking politicians to sign up to a coalition agreement that would mean "the destruction of Greece".
For full version http://www.guardian.co.uk/world/2012/may/08/eurozone-crisis-austerity-greece-alexis-tsipras
